Shipping goods internationally comes with risks that are easy to overlook until something goes wrong. Weather events, vessel incidents, theft, and mishandling can all result in damaged or lost cargo, and the financial consequences can be significant. Understanding what carrier liability actually covers, and where it falls short, is one of the more practical steps any importer or exporter can take to protect their business.
What Carrier Liability Actually Means
When you ship without insurance, your shipment falls under carrier liability by default. This is not the same as being insured. Carrier liability is the limited default coverage that applies when no insurance has been selected, and it works very differently from what most shippers expect.
Under carrier liability, claim payouts are not determined by the value of your goods. To receive any reimbursement at all, you must first prove that the carrier was directly responsible for the damage or loss. Even if fault is established, the amount the carrier is required to pay is strictly limited. For ocean shipments, the carrier’s maximum payout is $500 per container. For air shipments, the maximum is approximately $30 per kilogram. Neither figure comes close to the actual commercial value of most shipments.
There are also circumstances where carrier liability does not apply at all. Natural disasters, acts of war, and certain other events are exclusions, meaning any damage or loss caused by these situations is not eligible for reimbursement regardless of the circumstances.
What All Risk Cargo Insurance Covers
Jade International offers All Risk cargo insurance with zero deductible as part of our specialized services, which provides a fundamentally different level of protection. Rather than being limited to what a carrier agrees to pay after fault is proven, All Risk insurance covers the full value of your shipment against damage or loss in transit.
Coverage includes damage caused by fire, water, theft, and other accidents, loss of cargo through sinking, collision, and other incidents, and delays in delivery due to weather, strikes, or other events. In the event of a total loss, compensation is 110% of the cost, insurance, and freight value of the shipment. Coverage applies to the total insured value regardless of whether goods are moving by ocean, air, or through our warehousing facilities.
There are limitations worth understanding. Damage or loss due to war, civil unrest, or other political events is excluded, as are natural disasters such as earthquakes and hurricanes. Consequential losses, meaning losses not directly caused by physical damage to the cargo such as lost profits or business interruption, are also excluded.
